The Sharemarket Crash: 30 years on

For some of you reading this blog, 1987 will seem like ancient history – way before you were born. For others, the share market crash of that year remains unforgettable.

As a young accountant at the time, it seemed like the world was about to end, with investments on 19th October 1987 worth a fraction of what they were just days before.

This week marks 30 years since that memorable day. In a recent article written by Geoff Wilson of WAM Capital fame, he reminds us of some lessons learnt from this historic event:

Never panic and always take a long-term view – the world of finance did not end on 19 October 1987.

Be patient – the Dow Jones Industrial Average only took two years to recover the loss of October 1987.

Work against your emotions – be excited about buying when others are panicking.

“The time to buy is when there’s blood in the streets” – Baron Rothschild has been proved right after many market crashes.

Despite such advice coming from a seasoned player, history shows that few will follow it. Most will panic in the moment, and repeat the mistakes of those before. Don’t fall into that trap. Partner with a financial planner who will give you an objective perspective and a clear head, when the emotions are begging to take control.

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